Dell Crushes Earnings Forecasts|
November 25, 2020
Dell Technologies reported financial results for its fiscal 2021 third quarter. Revenue was up 3% to $23.5 billion. The company generated operating income of $1.1 billion, a 35% increase over the same period in the prior year, and non-GAAP operating income of $2.7 billion, up 12%. Net income was $881 million, non-GAAP net income was $1.7 billion and adjusted EBITDA was $3.2 billion. Net cash from operating activities was $3.0 billion. Diluted earnings per share was $1.08, up 64% and non-GAAP diluted earnings per share was $2.03, up 16%.
The company's adjusted earnings of $2.03 a share and revenue of $23.48 billion topped expectations of $1.42 in adjusted earnings a share and sales of $21.9 billion.
“Technology has never been more important, and as the world evolves, so
does our business,” said Jeff Clarke, vice chairman and chief operating
officer, Dell Technologies. “ We met unprecedented demand for remote
work and learn solutions this quarter while increasing revenue to $23.5
billion. At the same time, we accelerated our as-a-Service strategy and
hybrid cloud capabilities at the edge – positioning us to win in these
growing markets and making it easy for customers to manage data and
workloads across all their operations.”
Dell Technologies ended the quarter with cash and investments of $13 billion and paid down $4.6 billion in debt during the quarter. The company had total deferred revenue of $28.7 billion as of quarter end, up 11% year-over-year. Recurring revenue, which includes deferred revenue amortization, utility and as-a-Service models was approximately $6 billion for the quarter, up 13% year-over-year.
“We delivered differentiated performance through our diversified portfolio and are leaning into growth opportunities while managing operating expenses in a disciplined way,” said Tom Sweet, chief financial officer, Dell Technologies. “In the third quarter, we drove value by expanding profitability at a significant multiple of revenue and generated $3 billion in operating cash flow.”
Operating segments summary
Client Solutions Group revenue for the third quarter was a record $12.3 billion. Operating income was a record $1.0 billion, up 36% and 8.2% of Client Solutions Group revenue. The company saw continued demand for remote work, learning and gaming solutions. Consumer revenue was $3.5 billion, up 14%, while commercial client revenue was $8.8 billion, up 5%.
Infrastructure Solutions Group revenue for the third quarter was $8.0 billion, with customers continuing to direct more spending towards remote work and business continuity solutions. Storage revenue was $3.9 billion, while servers and networking revenue was $4.2 billion. Operating income was $882 million for the third quarter, or approximately 11% of Infrastructure Solutions Group revenue.
VMware revenue was $2.9 billion for the third quarter, up 8% driven by broad-based strength across a diverse product portfolio. Operating income for the quarter was $837 million, or 28.9% of VMware revenue.